Stag Engineering Company Ltd. V. Sabalco Nigeria Ltd & Anor (2008)

LawGlobal-Hub Lead Judgment Report

HON. JUSTICE UWANI MUSA ABBA AJI, J.C.A.

This is an appeal against the decision of the High Court of Kogi State sitting at Lokoja in suit No: HCL/40/94 delivered on the 28th day of July, 2005.

The Respondents as plaintiffs instituted this action against the Appellant as defendant, claiming inter alia as per paragraph 27 of their statement of claim as follows:-

WHEREOF the plaintiffs claim as follows:-

1. The sum of N3,000,000.00 being damages for breach of contract to supply brand new 500KVA Perkins/Rolls – Royce Generating Set.
2. A declaration that the Defendant breached the agreement reached between the plaintiffs and the Defendant sometimes in September, 1993 to supply brand new Perkins/Rolls Royce Model 500KVA.
3. A declaration that the Cummins 550 KVA refurbished generating set supplied by the defendant is at variance with the contract.

Whereof the plaintiffs claims from the Defendant the sum of N3, 000,000.00 as damages for breach of contract and as per 1-3 above.

Pleadings were duly filed and exchanged. The Respondents called two witnesses while the 2nd Respondent testified as PW3. PW1 and PW2 are officers of the Kebbi State Government who inspected and found that the Cummins 550 KVA Generator supplied by the Appellant was a second hand, refurbished and repainted one.

The case of the Appellant was that the Respondents entered into a contract with it for the supply of a new British manufactured diesel generating plant 500 JJA, to be supplied to Kebbi State Government and to be delivered at Wasagu in Birnin Kebbi. The contract price was N2.3 million and the Respondents made a deposit payment of N500,000.00 leaving a balance of N1.8million in respect of which a post dated cheque was issued for the said sum to the Appellant. The balance of N1.8 was expected to be paid after delivery of the generator and payment therefore by the Kebbi state Rural Electrification Board. The Appellant sourced for a brand new British Cummins generator but had problem with capacity specification as the one available in the market which the Appellant could get was 550 KVA as against 500 KVA. That the 2nd Respondent was informed as to the brand and capacity which was available and he agreed that it be supplied so as to beat the deadline as indicated in the Respondent’s contract with the Kebbi State Government. The Appellant purchased the Cummins diesel generating plant 550 KVA from ITT and the way bill that covered the generator on its way to Wasagu, Kebbi State, described the generator as brand new British manufactured industrial diesel generating set 550 KVA capacity Cummins generator. That the generator was duly delivered and received.

That contrary to the contractual terms, the Respondents were paid for the generator but the Respondents refused/failed to pay the outstanding balance of N1.8 million to the Appellant. That the post dated cheque issued to the Appellant by the Respondents was dishonoured on presentation. That the Respondents did not pay the outstanding balance of N1.8million for the generator despite the fact that they were fully paid by Kebbi State Government and they did not also return the generator, rather they instituted the action damages for alleged breach of contract.

The case of the Respondents as stated by PW3 who is its Managing Director, and the 2nd Respondent was that, sometimes in 1993, the Kebbi State Government entered into a contract with the Respondents for the supply of a new 500 KVA Perkins/Rolls Royce generating set. The 2nd Respondent as the Managing Director of the 1st Respondent approached the Appellant Company, an Engineering company dealing in Generators to supply one new Perkins/Roll Royce generator to Kebbi State Government, delivery of which should be made at Wasagu in Birnin Kebbi at a cost of Two million Three hundred thousand Naira (N2.3m). It is the case of the Respondents that instead of delivering a brand new Perkins/Roll Royce bargained for, the Appellant Company supplied a refurbished and repainted 550 KVA Cummins generator at the same rate with the agreed brand new Perkins/Roll Royce generator thereby breaching the contract that was legally binding on the parties.

“At the close of evidence, learned counsel addressed the court. In a considered judgment delivered on the 28th day of July, 2005 the learned trial judge entered judgment for the Respondents and awarded the Respondents N1.8million as general damages for breach of contract.

The Appellant not satisfied with the said judgment, appealed to this court vide a Notice of Appeal dated and filed on the 4th August, 2005 upon the following grounds of Appeal. The grounds of Appeal short of their particulars are hereby restated:-

1. The Learned trial judge erred in law when he held that the Appellant breached contract and was liable in damages to the Respondent.
2. The learned trial judge erred in law when he based his assessment of damages on wrong principles and extraneous considerations.
3. The judgment of the court below is against the weight of evidence.

As is the practice in this court, parties filed and exchanged briefs of argument. In the Appellant’s brief settled by Duro Adeleye, Esq. learned counsel formulated three issues for determination, namely:

1. Whether indeed, the Appellant was in breach of contract and therefore liable to general damages.
2. Whether the judgment of the court below followed the flow of evidence.
3. Assuming but not conceding that there was a breach of contract whether the measure of assessment of general damages by court below was proper in law.

In the Respondents brief settled by Chief U. M. Enwere Esq. learned counsel adopted the three issues for determination as formulated by Mr. Adeleye, for the Appellants.

At the hearing of the appeal on the 26th May, 2008, learned counsel for the appellant adopted and relied on the Appellant’s brief of argument dated 21st April 2008 and filed on the 24th April 2006 and urged the court to allow the appeal. The Respondents also adopted their brief of argument dated 29th November, 2007 but deemed filed on the 4th December 2007 and urged the court to dismiss appeal.